Shares of Yes Bank rallied 39 percent intraday on October 31 after the priavte lender received a binding offer of $1.2 billion from a global investor.
The stock has surged 60 percent in the past one month. The stock closed at Rs 70.45 on the BSE, up 24.03 percent.
The bank informed exchanges that it has received a binding offer for $1.2 billion from a global investor through fresh issuance of equity shares, subject to regulatory, board and shareholders' approvals.
The bank also continued to be in advanced discussions with other global and domestic investors, it said.
On September 25, the bank had talked about capital raising plans, saying it had received strong interest from multiple foreign and domestic private equity and strategic investors.
The board of directors was likely to consider SPGP and other proposals with the September quarter results on November 1, CNBC-TV18 quoting sources as saying.
Carlyle, Farallon and two family offices had been in talks for fund infusion, while Hong Kong-based SPGP Holdings had shown interest in investing around $1.2 billion, CNBC-TV18 said.
An approval from the Reserve Bank of India is required for a majority stake sale in a bank via capital infusion.
The central bank may consider stake sale under tweaked ownership norms of 2017 and SPGP had shown interest in buying Reid & Taylor via Insolvency and Bankruptcy Code (IBC) process, sources said.
The bank, however, denied any such development while answering a CNBC-TV18 query.
If there was a patient capital, then it was good for Yes Bank, Krishnan ASV, SBICAP Securities, said. "We can't evaluate Yes Bank with one or two quarters earnings, need some strong resolution," he said.
Market expert Prakash Diwan said if results on November 1 won’t show any fresh slippages, then, with the current fund-raising, there would be rerating and return of faith in the bank.
Here is what other analysts say about Yes Bank after the binding offer:
Santosh Meena, Senior Analyst, TradingBells
Yes Bank has rallied 171 percent from the low of Rs 29 which was made on the October 1 which was the last day of selling of pledged shares.
Technically Rs 79-81 is a critical resistance zone which is also near the previous QIP price of Rs 87, therefore, it is difficult to see further upside from here in the near term. And it will post its Q2 results on November 1 which may cause some selling pressure.
In the short term, investors should avoid any long position at the current level while a correction in the Rs 60-55 zone will be a better opportunity to take a risk as a long term bet.
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